The mining industry on the Iron Range has yet to feel the impact of the financial turmoil that’s slowing the U.S. economy, but experts say some newer projects may be affected.

Officials with Cleveland Cliffs and U.S. Steel say there have been no changes in taconite production at their five plants on the Range.

But several experts are concerned that nonferrous metals startup projects needing intensive capital injections may soon be affected. It doesn’t help that copper and nickel prices have fallen in recent months, they said.

Commodities prices and availability of credit are two of the major determinants for mining projects on the Range that are ready to build or are exploring, said Jim Skurla, acting director of the University of Minnesota Duluth’s Bureau of Business and Economic Research.

The unsettled markets may well impact companies exploring for nonferrous metals like Franconia Minerals and Duluth Metals, and “probably will slow that down,” he said.

But taconite producers don’t seem to be in any trouble for now, as “they’re pretty well funded,” Skurla added.

Steel companies still have some optimism for demand from some sectors, such as energy projects like oil drilling, offshore platforms and wind turbines, as well as infrastructure and commercial building, said Nancy Gravatt of the Washington-based American Iron & Steel Institute.

“Obviously, there’s tremendous volatility in the market,” she acknowledged.

The automotive sector’s demand for steel has been slow for a while, and “now residential construction has flattened out,” she said.

Franconia Minerals Corp., which has a barge-based copper-nickel drilling operation on Birch Lake near Babbitt, hasn’t been affected yet, said Ernie Lehmann, a minerals explorer with the company.

However, he said, credit is an industrywide concern now, and money for exploration us is “very tight.” Companies that depend on equity markets until production and cash flow get going need to conserve cash until markets are more friendly, he added.

Rick Sandri, CEO and president of Duluth Metals Ltd., said his company has not slowed its exploratory drilling near Ely, but is watching its dollars to conserve cash.

“The ability to raise equity capital has diminished a lot,” Sandri said. Things that can be pushed back until next year or so, will be, he said.

PolyMet Mining Corp., which is looking to start up a precious metals mine near Hoyt Lakes, is in good shape despite the financial turmoil, spokeswoman LaTisha Gietzen said.

“It really hasn’t affected us right now,” she said. “The delay in permits is making investors frustrated.” A draft environmental impact statement on PolyMet’s operation is expected by the end of the month.

Posted in : Drilling, Mining Companies, Mining Exploration, Mining Industry, Mining Top News, Mining Trade & Market